Bank lending to NBFCs jumps 190 bps to 8.8 pc since Sept 2018

Bank lending to NBFCs declined marginally to Rs 9.36 lakh crore from Rs 9.49 lakh crore in May 2020, owing to a fall in mutual funds funding and reduction in the activity level of NBFCs, according to the report. Amid continuing calls for more bank loans to non-banking lenders, the latest data showed that banks have already been lending more to them increasing their overall exposure to NBFCs by 190 basis points to 8.8 per cent between September 2018 and June 2020, according to a report by CARE Rating. In absolute terms, banks’ outstanding to NBFCs saw a huge growth of […]

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Shriram City cuts loans to small firms by 99%; turns cautious on its most important clients

Loans to small businesses including grain merchants, which make up a little over half of the company’s borrowers. Shriram City Union Finance Ltd., an Indian shadow lender backed by Apax Partners, is turning cautious on its most important set of customers as the coronavirus pandemic roils businesses. Loans to small businesses including grain merchants, which make up a little over half of the company’s borrowers, plunged 99% to 200 million rupees ($3 million) in the June quarter from a year ago. While there’s demand for small-ticket loans, the financier prefers to wait for more clarity on their recovery, according to Chief […]

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Debit, credit card use climbs back to pre-COVID level; consumer spending rises amid layoffs, salary cuts

Transactions using debt and credit cards soared to Rs 1,05,266 crore in June, more than double the figures of Rs 49,807 crore in April. Value of transactions through credit and debit cards have reached pre-COVID levels after witnessing a major drop in April. The same has jumped 111% in June as compared to April this year, when India was under one of the strictest lockdowns in the world due to the coronavirus pandemic, according to the data by the central bank. Transactions using debt and credit cards soared to Rs 1,05,266 crore in June, more than double the figures of Rs […]

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Credit cost to more than double for NBFCs, says Acuite Ratings

RBI had earlier allowed lenders to restructure personal as well as corporate loans with strict barriers. Despite restructuring relief from Reserve Bank of India (RBI), credit costs are likely to more than double for most of non-banking players, Acuite Ratings and Research said on Thursday. In a discussion on non-banking financial companies (NBFCs) amid Covid-19, the rating firm said that profitability headwinds for shadow banks would remain high due to sharp decline in disbursements. RBI had earlier allowed lenders to restructure personal as well as corporate loans with strict barriers. PN Prasad, former deputy managing director (DMD), State Bank of India, […]

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RBI tightens corporate governance norms for core investment firms

The notification does not specifically mandate the setting up of other board-level committees, such as those for audit and remuneration, as suggested in the report of the working group. The Reserve Bank of India (RBI) on Thursday released a revised set of guidelines for core investment companies (CICs), tightening corporate governance and disclosure norms for these entities. The report of the working group on CICs was released in November 2019. A CIC is a non-banking financial company (NBFC), which carries on the business of acquisition of shares and securities and holds not less than 90% of its net assets in the […]

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US firm Fiserv to support Federal Bank to launch credit card

The Kerala-based lender has also outsourced the associated operational processes to Fiserv. Federal Bank on Thursday said it has chosen Fiserv, a global provider of payments and financial services technology solutions, to enable digitisation of the bank’s end-to-end card issuance and processing cycle. The US company will support the launch of Federal Bank credit card. The Kerala-based lender has also outsourced the associated operational processes to Fiserv. “At Federal Bank, we have a track record of deploying the best digital infrastructure to cater to our customers,” says Shalini Warrier, executive director and business head – retail at Federal Bank. “Fiserv supports […]

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Lot has been done, but best of HDFC Bank yet to come, says Aditya Puri

Earlier this month, HDFC Bank appointed Jagdishan as the managing director with effect from October 27, when Puri turns 70. A lot has been achieved in the 26-year old journey of HDFC Bank but the “best is yet to come”, the lender’s outgoing Managing Director Aditya Puri said. Puri expressed satisfaction that he was passing on the baton to Sashidhar Jagdishan, who is the “worthiest person” to lead the bank. Earlier this month, HDFC Bank appointed Jagdishan as the managing director with effect from October 27, when Puri turns 70. “I haven’t been happier than I’m now as I write this. […]

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Poonawalla Finance eyes 35% gowth in loan book in FY21

The over USD 11.4-billion Cyrus Poonawalla Group, which fully owns the firm, has infused Rs 850 crore equity into the company. Poonawalla Finance, the NBFC arm of the Cyrus Poonawalla family that owns the world’s largest vaccine maker Serum Institute of India, aims to grow its loan book by at least 35 per cent this fiscal despite losing the first quarter to coronavirus-induced lockdowns. The Pune-based firm, which began operations in April 2019, closed fiscal 2020 with a loan book of Rs 1,500 crore, of which Rs 1,150 crore is outstanding now. In July, the loan book expanded by Rs 250 […]

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Airline pilots, hoteliers, and journalists a no-go area for bankers as getting loans becomes tougher

Not all lenders, however, are shutting out risky borrowers altogether. With the economy under duress, bankers are are scrutinising retail borrowers a lot more stringently these days. They’re even refusing loans to customers employed in Covid-hit sectors like aviation, hospitality and media. These professionals are now virtually off limits especially for private sector players. Those that are able to access loans get smaller amounts and at a relatively higher rate of interest. The self-employed, too, are subjected to greater scrutiny. For now at least, only government employees can hope to get bank loans and at a much higher loan to value […]

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One-time loan recast scheme difficult to implement: Srei Infrastructure Finance V-C

Also, the proposed plan has set March 1 as the reference date for the outstanding amount of debt restructuring, provided the loan continues to remain standard till restructuring is invoked. The resolution plan proposed under the Reserve Bank of India (RBI)’s new one-time loan recast scheme appears complex, and would be difficult to implement, says Sunil Kanoria, vice-chairman, Srei Infrastructure Finance. In an interview with Mithun Dasgupta, Kanoria says going forward non-banking finance companies (NBFCs) would face a “serious mismatch” in their cash flows as it seems that loans borrowed by them may not to be eligible for the latest one-time […]

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